CLEVELAND, Ohio -- Ohio insurance regulators Thursday released rates for health insurance to be sold on the new state marketplace and said premiums for individuals will rise an average of 41 percent compared with 2013 rates.

That average brought immediate condemnation from critics of the Affordable Care Act, with U.S. House Speaker John Boehner, a southwest Ohio Republican, calling it “irrefutable evidence” that the law known as Obamacare is driving up costs and hurting the economy.

But the average 2014 premium of $332.58 a month for individuals, unveiled by Ohio Lt. Gov. Mary Taylor, masks the fact that for many individuals, premiums and out-of-pocket medical expenses will go down.

View full sizeLt. Gov. Mary Taylor, a Republican critic of the law known widely as Obamacare, said her department estimates individual premiums for health insurance sold on the state marketplace will increase on average by 41 percent in 2014.Thomas Ondrey / The Plain Dealer

The marketplace, or “exchange,” will allow people who do not get coverage through their employers or a public program -- a relatively small portion of the population -- to purchase health insurance.

Eighty to 90 percent of Americans using the exchange will be eligible for income-based federal subsidies to reduce or eliminate their costs, according to the Congressional Budget Office. Those who make less than four times the federal poverty level -- $45,960 a year for a single person and $94,200 for a family of four-- will be eligible. A 30 year-old that makes $30,000, for example, will be expected to pay only $2,512 in premiums per year. That means he or she will pay $209 a month, and the federal government will cover about $76.

The previous state average premium, which Taylor said was $236 this year, used to calculate the 41 percent increase is “artificially low,” said Larry Levitt, Senior Vice President of the nonpartisan Kaiser Family Foundation. The 2013 premium is based on an array of policies, many of which will no longer be available under the Affordable Care Act, he said. Some, for example, only offered catastrophic coverage and required deductibles of $10,000 and more.

While Levitt acknowledged that setting higher standards for coverage increases premiums, he said with more comprehensive coverage, out-of-pocket costs will go down.

Secondly, Levitt said that the 2013 premium is based on a much healthier pool of people than the average population, as people with pre-existing conditions can currently be denied coverage. The Affordable Care Act forbids insurers from discriminating against people with pre-existing conditions, which increases the 2014 premium.

By spreading the costs and the risks among thousands of enrollees, and by offering subsidies to make insurance affordable for many, the exchanges will make it possible for people with pre-existing conditions or illnesses to get coverage for the first time, said Cathy Levine, executive director of the Universal Health Care Action Network of Ohio.

“It’s too bad for Ohio consumers that Mary Taylor has concealed as bad news what is actually great news – that the federal exchange will increase access to affordable health insurance to nearly 1 million people who are currently shut out of the insurance market,” Levine said.

The one fact most agreed upon: Premiums are likely to go up for young, healthy individuals who buy their own health coverage, but that’s before considering the subsidies to offset their costs. Older, pre-Medicare individuals will probably see lower prices.

But for their money, both groups, as well as those in between, will see a richer array of benefits, which Taylor acknowledged.

Proponents of the Affordable Care Act see this as good. Critics see this as reducing consumer choice.

Companies such as Medical Mutual of Ohio, to give one example, have offered many different plans but now will package benefits in only 10 different plans for individuals, plus two small-group packages for businesses. Consumers will be able to choose from four different cost sharing tiers -- from bronze, which will have the lowest premiums, but the highest deductibles, to platinum plans, which will have the highest premiums, but lower out-of-pocket costs and deductibles.

On average, “everybody will pay more,” said Steffany Larkins, Medical Mutual’s chief of staff. But that’s before subsidies kick in, and customers will “utilize a broader base of benefits,” she said.

Asked why she focused on individual premiums and costs but did not mention the reductions that will come from federal subsidies, Taylor said that the insurance department did not have the necessary information to calculate the impact of subsidies.

She also said that the subsidies come from federal taxes, so they do not represent free money.

Brian Rothenberg, executive director of the left-leaning ProgressOhio, said that announcing the rates without factoring in subsidies “makes no sense” and is “cynical because that’s not how people are going to buy insurance.”

“She shouldn’t announce rates without illustrating what that means for real people benefiting from tax credits that can be substantial in some moderate income categories,” Rothenberg said.

The Ohio premiums still must be approved by federal officials before the health care exchanges open this fall for coverage that starts in January. But Taylor said they are based on sound underwriting principles and she does not expect them to change.

Her figures, the first firm ones for Obamacare in Ohio, brought criticism from an array of Republicans, who said Ohio’s individual-market rates confirm their earlier fears.

“President Obama’s big government health care bill was supposed to bend the cost curve down,” said U.S. Sen. Rob Portman of Ohio. “Instead, the average individual premium payer is out nearly an extra $100 a month. That’s money that could be going toward retirement, groceries, and their children’s higher education; instead it’s going to cover President Obama’s costly mandates.”

U.S. Rep. Dave Joyce of Russell Township said the news “provides more evidence that the health care law is hurting, not helping, Ohio families.”

The insurance department narrowed the number of plans to be sold on the exchange to 200, offered by 12 companies: Anthem, AultCare, Buckeye Community Health Plan, CareSource, Coventry, HealthSpan, Humana Health Plan of Ohio, Kaiser, Medical Health Insuring Corp. of Ohio, Molina, Paramount, and Summa.

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